Raghuram Rajan during a news conference at the central bank’s headquarters in Mumbai, Sept. 20.

Bloomberg News

Reserve Bank of India Gov. Raghuram Rajan has earned a reputation as a maverick for defying market expectations. We’re starting to learn that he’s not afraid to be something of a lone ranger within the central bank as well.

Minutes from the RBI’s January monetary-policy meeting, released this week, show that Mr. Rajan’s surprise decision to raise interest rates by 0.25 percentage points last month was opposed by a majority of his seven external monetary-policy advisors.

According to the minutes, four external members of the RBI’s technical advisory committee on monetary policy recommended keeping the repo rate at 7.75% because of political uncertainty and weak economic growth.

Two committee members supported a rate hike, citing high inflation and the RBI’s earlier stated commitment to price stability. One member recommended a rate cut, “to demonstrate the Reserve Bank’s concern that growth does not come to a grinding halt.”

There’s no indication that Mr. Rajan, who took the reins at the bank in September, has made a point of flying against his experts’ wisdom: At last October’s meeting of the advisory committee—the only other Rajan-era meeting for which minutes have been released—the governor’s decision to hike rates was supported by a majority of the committee’s external members.

But it underlines the tricky economic circumstances under which last month’s monetary-policy decision was made. India’s economy is growing weakly, prices are volatile, and both domestic and global uncertainties still loom large.

It also highlights the undemocratic nature of decision-making at the highest level of the Indian central bank. The advisory committee, which includes the governor and his deputies as internal members and a group of outside experts as external members, was first set up in 2005. It meets at least once a quarter—less frequently than the RBI conducts reviews of monetary policy—and its members’ views aren’t binding on the governor’s decision. The RBI only began releasing minutes from the committee’s meetings, with a four-week lag, in 2011.

The advisory committee is therefore, as its name suggests, purely advisory. At the RBI, policy-making authority and responsibility is vested exclusively in the governor, who in turn is directly accountable to the Indian government.

Lots of people at the central bank aren’t happy with this way of doing things. An internal RBI panel tasked with revamping the bank recommended, in a report published last month, that monetary-policy decision-making power be formally vested in a five-person committee. The committee would meet every two months, and minutes from committee proceedings would be released with a two-week lag. Failure to achieve a proposed inflation target would require the committee to issue a statement explaining why they failed and what they’re going to do to get back on track.

The January report is the latest in a series of efforts to change the way Indian monetary policy is made. Three separate committees—in 2002, 2006 and 2009—have recommended that a formal monetary-policy committee play a more active role in guiding RBI decisions. The 2009 committee was chaired by Mr. Rajan, who was teaching at the University of Chicago at the time.

Last month, Mr. Rajan said he would use the latest report’s proposed “glide path” toward lower inflation as a policy guide. But Mr. Rajan also insisted that officially adopting the reform recommendations will take time.

So for now, India’s monetary policy will continue largely to be the outcome of a closed-room deliberation, steered and ultimately decided by one man. And that man will continue to keep RBI-watchers—and his own experts—on their toes.

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